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Futures: Outplay Present Traders
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Futures are
standardized contracts, which are traded on the exchanges.
The agreement between a seller and a buyer requires the
seller to deliver to the buyer a specified quantity of
security, commodity or foreign exchange at a fixed time in
the future at an agreed price, at the time of entering the
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Normally, speculators deal
in futures contracts to benefit from the price
fluctuations in the underlying asset or
commodity, since they are tradable under high
liquidity. Future contracts are favored by
their high returns versus their high risks.
Trading futures contracts is done with
performance margin; therefore, it requires
considerably less capital than the physical
market. They are required to deposit margin
money, around 10% of the contract size. Future
contracts, in return, have some negative
characteristics, stating that, any operation in
the future markets shall be closed after a
specified period of time, whether the operation
is making profit or loss. Anyone looking to
invest in futures should know that the risk of
loss is substantial. This type of investment is
not suitable for everyone.
Click to attend the introductory course:
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